To help small entrepreneurs compete in global market, export earnings must be paid quickly

There are no exact statistics on how many small entrepreneurs in Bangladesh are currently engaged in IT and B2C e-commerce businesses. However, their numbers are increasing, and with the right policies, exports and export diversification from this sector could grow further. These small entrepreneurs mainly run their businesses using social media platforms such as Facebook, Instagram and F-commerce.

They also sell products through online marketplaces and their own websites, but most of them rely on dropshipping — meaning they do not keep products in stock. They take orders directly from customers, then source the items from other producers or their own production units and send them to the buyers’ addresses. A large portion of Bangladesh’s e-commerce operates under this model, and international dropshipping is also possible through online platforms. However, for cross-border e-commerce in Bangladesh, the repatriation of export earnings remains a major obstacle.

Global B2C e-commerce sales amounted to around $6.3 trillion in 2024, and forecasts suggest the figure may reach $8.1 trillion by 2027. Online retail sales have surged mainly due to mobile shopping, digital wallets, AI-based personalisation, and improved logistics systems, which have made it easier to buy preferred products from anywhere in the world. While various retail innovations have created opportunities, Bangladeshi small entrepreneurs have not benefited much because the payment systems in place make it difficult for them to receive payments. The same complex export regulations apply to both a $10 export and a million-dollar export.

Creating marketplaces for SMEs and ensuring they can promptly receive payments for their sales remains a challenging issue. A recent discussion organised by the SME Foundation revealed that, despite strong demand for their products, the entrepreneurs lack adequate payment gateways to receive money instantly after sales. Existing systems are either insufficient or fail to meet SME requirements. In other words, communication between business and consumer (B2C) remains limited. If the B2C system allowed instant payments, small entrepreneurs could expand further into global markets, diversify exports, improve cash flow, and increase investment.

B2C sales are currently constrained because the necessary payment gateways are not properly developed. Although several gateways — such as SSLCOMMERZ, AamarPay, and ShurjoPay — are operational, small entrepreneurs are not satisfied with their services. Mobile wallets like bKash and Nagad are also available. SSLCOMMERZ dominates around 70 percent of the market and functions as an aggregator. However, even for small payments, exporters are required to submit an EXP form, a mandatory export document. Exporters must complete this form through authorised dealers (ADs), who then send it to Bangladesh Bank for monitoring, as part of foreign exchange regulations. Completing an EXP form for a very small transaction is a major hassle, preventing many small exporters from fulfilling orders.

Small entrepreneurs are active in sectors such as leather and leather goods, jute and jute products, handicrafts, agricultural products, light engineering, and ceramics. Many of these products are exported to different countries, but there are also significant challenges. The entrepreneurs believe that if these barriers were removed, they could contribute much more to the economy.

There is, however, some good news for small entrepreneurs. On 31 July, Bangladesh Bank issued an FE Circular stating that for B2C exports conducted through e-commerce websites, the submission of an EXP form to Customs will not be mandatory if the export value is up to USD 500. The condition is that payment must be received before shipment, and the exporter must submit a declaration from the customer confirming that the full export value will be received. This provision was made under the Guidelines for Foreign Exchange Transactions (GFET) Volume-1, and it effectively replaces the previous circular. The directive will remain valid for one year.

This is a positive initiative for small entrepreneurs, but many are unaware of it. Efforts should be made to publicise it. Even banks have not given it much attention. Since banks generally have little incentive to support small entrepreneurs, it is not a priority for them to ensure these benefits reach the SMEs. Two months have already passed since the circular took effect; it remains uncertain how many will be able to take advantage of it in the remaining ten months.

In Bangladesh’s IT sector, freelancers are already working in IT and IT-enabled services (ITES), but repatriating export proceeds remains very difficult for them. Therefore, they often rely on international payment gateways such as Skrill. These services handle intangible, small-value transactions — typically between USD 10 and USD 50 — which are paid quickly through digital wallets. These freelancers primarily sell directly via B2C systems, where traditional export documentation like the EXP form is almost impossible. However, such digital wallet facilities are not allowed for tangible goods. Bangladesh Bank prefers to keep export proceeds within the banking channel to comply with all regulatory requirements, citing risks of smuggling, under-reporting, and foreign exchange losses if digital wallets were permitted for physical goods.

Nevertheless, the temporary benefit offered through Circular 31 can bring some relief to small entrepreneurs. If it proves successful, advocacy can be made to extend or expand it in the future. Since payment must be received before shipment, it may operate similarly to a telegraphic transfer (TT). However, some entrepreneurs report that banks often do not release the full payment received via TT until after shipment, which could create cash-flow problems for B2C e-commerce exporters, as they need funds upfront to buy raw materials and cover production costs.

Another long-standing problem is the import of samples. Small entrepreneurs describe their difficulties in importing samples as a “historic pain.” In other countries, this issue has been resolved with a simple definition: a sample is an item unfit for use, perforated, or blemished — having value only for demonstration. In Bangladesh, however, numerous procedures exist. The import policy specifies that the number of samples cannot exceed a fixed quota, which applies mainly to the readymade garments and leather sectors. For other sectors, entrepreneurs must seek approval from the Export Promotion Bureau.

A de minimis value of USD 2,000 is allowed, but if the value or quantity exceeds this limit, a letter of credit (LC) must be opened — a process nearly impossible for small entrepreneurs in terms of both cost and time. Entrepreneurs claim they often have to pay extra money to customs to release their samples, which makes them uncompetitive.

Most SMEs source raw materials from commercial importers since they do not have bonded warehouse facilities. The 2025–26 national budget proposed the establishment of a central bonded warehouse, but it has not yet been implemented. Although partial bonded facilities were also mentioned in the import policy, those too remain unrealised.

According to the 2024 Economic Census, Bangladesh has 11.8 million business establishments, of which around 11 million are small enterprises — categorised as cottage, micro, small, and medium. The largest share is cottage enterprises, followed by micro. It might have been better to combine the small and medium categories or the medium and large ones into CMS and LMS. However, in Bangladesh, “SME” has become a popular buzzword, and everyone prefers to use it.

These small industries have adapted to the times by entering e-commerce and, in some cases, B2C business models. Yet they continue to face significant obstacles in receiving export proceeds. If this process were simplified, small enterprises could become far more vibrant. Scheduled banks must play a more SME-friendly role for this potential to be realised.

Ferdous Ara Begum is an economist and Chief Executive Officer of Business Initiative Leading Development (BUILD)